Finding Text
Housing Assistance Payments Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Voucher Cluster Assistance Listing Number: 14.871/14.879/14.EHV Federal Award Identification Number and Year: VA901; 2024-2025 Award Period: July 1, 2024 through June 30, 2025 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: The PHA must pay a monthly HAP on behalf of the family that corresponds with the amount on line 12u of the HUD-50058. This HAP amount must be reflected on the HAP contract and HAP register (24 CFR section 982.158 and 24 CFR Part 982, Subpart K). A payment standard is used to calculate the monthly housing assistance payment for a family. The “payment standard” is the maximum monthly subsidy payment. The PHA shall pay a monthly housing assistance payment on behalf of the family that is equal to the lower of: (1) The payment standard for the family minus the total tenant payment; or (2) The gross rent minus the total tenant payment. The payment standard for the family is the lower of: (i) The payment standard amount for the family unit size; or (ii) The payment standard amount for the size of the dwelling unit rented by the family. 24 CFR 982.505. PHAs must adopt a payment standard schedule that establishes voucher payment standard amounts for each area in the PHA jurisdiction. PHAs must establish a payment standard amount for each unit size, measured by number of bedrooms (zero-bedroom, one-bedroom, and so on). These payment standard amounts comprise the PHA's payment standard schedule. Generally, PHAs may set payment standards within the basic range, which is 90 percent to 110 percent, of the HUD published Fair Market Rents (FMR) or Small Area FMRs (SAFMRs), whichever is applicable, without HUD notification or approval. PHAs may set payment standards outside of the basic range with HUD notification or HUD approval (24 CFR 982.503(d)). Condition/Context: During our testing of 60 tenant files for housing assistance payments requirements, we noted the following in 5 files: - 3 out of 60 files where the correct HAP contract could not be provided - 3 out of 60 files where the incorrect payment standard was used Questioned costs: None Cause: As a balance-of-state PHA, Virginia Housing administers the HCV program through 26 Local Housing Agencies (LHAs), each with varying staffing levels, internal review capacity, and documentation practices. During the audit period, HAP calculations and payment standard applications were primarily processed at the local level, with oversight conducted through periodic monitoring and quality control reviews. Certain documentation and calculation controls were not sufficiently standardized or centrally validated prior to final processing. In addition, enhancements to quality control procedures implemented during the fiscal year were not fully operational for the files selected for audit testing. These factors contributed to inconsistencies in documentation completeness and calculation accuracy. Virginia Housing will continue to evaluate the effectiveness of the enhanced QC process, monitor error trends, and assess whether additional measures are warranted. Effect: The lack of internal controls over the housing assistance payment (HAP) process could result in incorrect HAP being calculated or paid on behalf of program participants. Repeat Finding: No Recommendation: We recommend the Authority strengthen its controls to ensure proper documentation is maintained and that HAP contracts, payment standards, and HAP amounts are accurately applied and reviewed for compliance by its Agents. Views of responsible officials: There is no disagreement with the audit finding.